I want you to tell me if I understand disruption correctly.
So I finally got Internet in my apartment, and I hooked up my PS3. It was about five minutes before I realized I could watch TV shows on hulu.com. Except wait, I can’t, because it turns out that Hulu blocks the PS3’s browser. So whatever, my TV has a PC video out, so I can hook up my laptop and watch via that instead.
But it made me realize that the whole concept of not being able to watch the show you want when you want is quickly becoming outdated, old and busted. And with fast wireless routers available, the technology to have the Internet stream video to your TV is finally within almost anyone’s grasp (i.e. you don’t have to be an IT guru to set it up). But the old industry hates it, because their whole business is set up in order to make money by traditional “channels” and “prime time” and all that. It turned out that’s why they blocked Hulu on the PS3–it’s because PS3s are connected to TVs, and they don’t want people gathering on their couches to watch their favorite shows together at the wrong times and without the right commercials. But they won’t destroy the wave; the wave will destroy them.
Note: I’m not saying the PS3 is the disruptor. The Internet is. The PS3 doesn’t have enough appeal to become the device that leads the mass of customers into watching their favorite shows through the Internet. Apple could probably pull something off if they wanted to. They probably do and are just waiting for the right time. But whether it’s them or someone else, whoever moves in will do to cable TV what the ipod and itunes did to the record industry.
Am I correct in thinking that’s disruption?
Yes. That is definitely disruption.
A good way to weigh disruption is to use its opposite: sustaining change. What would be the sustaining change of television? It would be MORE channels such as what cable or satellite brings or a BIGGER TV. Sustaining change makes what is offered by more or “better”. Even when you pay for cable, you still are stuck watching commercials!
Disruptive change is changing the context. So instead of more channels, what about less channels but you can watch them whenever you want? That would be the seeds of disruption there.
As the pattern goes, the incumbent laughs at the disruptor. “He only has a few channels. But I have hundreds! Thousands!” In fact, the incumbent may be flowing with cash while the disruptor may not be getting as much. But the disruptor grows. The disruptor first attracts non-television viewers who were not watching television because they refused to re-organize their schedule around the television. Then, as more channels are added, unhappy people watching television switch. Then more and more. Eventually, a paradigm shift occurs in the television industry, and the values of time shifting entertainment becomes standard. The incumbent is gored. Its profits are lost to the disruptor.
You can see this pattern occur with most disruptions. Look at Amazon and the book stores. Nintendo and Sony/Microsoft. Google and Microsoft. Cars and railroads.
For centuries, we have always thought betterment of society and civilization came from better technology. And better technology always starts off expensive which means only the top customers can get it. But it was not that way at all. It was the low customers that drove betterment.
There is an old business saying: “Sell to the rich to become poor, sell to the poor to become rich.”
Why was the electric light invented recently after thousands if not millions of years of Human civilization? It is because the people at the top, kings and emperors, all had servants. They had someone to change the candles, to light them, and all. So civilization stayed frozen in time.
But by improving the people’s lives who are at the bottom was how the electric light truly caught on. Why would a king or emperor need an electric light if he could just order a servant?
Why were cars recently invented? Same reason. Kings and emperors had no reason for a car since other people pulled their wagon. But the poor people, who have to pull their own wagon, who have to ride horses, they were the ones that truly benefited.
Disruption is all about loving the low end.